From Rome
The Vatican officially announced this week that the IOR (Institute for Works of Religion), better known as the Vatican bank, closed its 2021 balance sheet with 18.1 million euros of net earnings, half of what he had earned in 2020 (36.4 million). In 2019, profits had been 38 million euros, double those obtained in 2018 (17.5 million). As explained by the Vatican, last year’s earnings are in line with expectations given the new business model applied to the IOR, which provides for a “prudent risk profile.”
The decline in donations The Obolo di San Pedro, the entity that receives money to help the Pope’s charitable works, was one of the factors that influenced the decrease in Vatican profits, and also the scarce presence of people in the Holy See during the pandemic, especially in the Vatican Museums. But above all, the reforms promoted by Pope Benedict and later concretized by Francis had an influence, which, among other things,had a series of accounts closed at the IOR in 2014 of people who were not entitled to have funds in the Vatican bank which is only available to Church personnel or Vatican employees. Shortly after Francisco also changed the statute of the IOR and also stimulated the carrying out of processes within the Vatican for financial crimes.
Since 2019, after the scandal over the purchase of a building in London with irregular funds came to light of the Vatican Secretariat of State -headquarters of the Vatican Secretary of State or Prime Minister-, the Pope decided that the funds of the Secretariat of State would pass to the Secretariat for the Economy, which now controls them.
In London business is Cardinal Angelo Becciu implicatedwho at that time was a substitute secretary of state, to whom Pope Francis dismissed of all its functions, even took away his right to vote in the next papal elections. Becciu and the others involved have been on trial at the Vatican since last year.
For the tenth consecutive year -before it was not common- this week, the IOR published its Annual Report on the 2021 Financial Statements prepared in accordance with the International Accounting and Financial Information Standards, something that Pope Francis always promoted in search of a greater financial transparency. After passing through control by the auditing company Mazars Italia, on April 26 the Report was unanimously approved by the Institute’s Superintendence Council, as provided for in the new statutes.
On June 5, on the other hand, the new apostolic constitution that reforms the Roman Curia and new appointments were expected from the Pope for the created dicasteries, that is, new offices that collaborate with the Pope. In this context, two days later the appointment of the Commission for Investments was announced – a body provided for in the reform of the Curia – which will be responsible for guaranteeing the “ethical nature of the Holy See’s real estate investments in accordance with the social doctrine of the Church and, at the same time, its profitability, adequacy and risk”, explained the Vatican.
The Pope chose as president of this Commission the Irish-American Cardinal Kevin Farrell, until now in charge of the Dicastery for Laity, Family and Life. But experts in economics and finance from different countries are also part of the committee.
Financial scandals and the pandemic
Francis considers these changes essential after the financial scandals that have ruined the image of the Vatican in recent decades, so that the IOR is transparent in terms of financial transactions and can avoid the recycling of money.
Created in 1942 by Pope Pius XII, the Vatican bank has gone through several periods of complicated scandals. Among them was the bankruptcy of Banco Ambrosiano in 1982, with which the IOR had close relations. The Vatican bank was then headed by Archbishop Paul Marcinkus. The Italian justice accused Marcinkus of recycling mafia money in connection with the Propaganda Due (P2) masonic lodge led by Licio Gelli – and of which, among others, the Argentine Admiral Emilio Massera was a member -, but the defendants, if they were Vatican citizens, they were never prosecuted for the validity of the Lateran Pacts, an agreement between Italy and the Holy See signed in 1929 that protected them.
Curiously, three people who had to do with the Ambrosiano bank died in very strange conditions and the deaths were attributed to the Mafia: Roberto Calvi, president of Banco Ambrosiano who had escaped to London, was found hanging under a Thames bridge. His secretary, Graziella Corrocher, jumped from the fourth floor of the bank in Milan, both in 1982. Michele Sindona, a P2 member close to the mafia and the IOR, died in jail after being given a cyanide-laced coffee in 1985.
As for these last more than two years of pandemic, it is known that the mafias have tried all kinds of financial operations to recycle the money obtained illegally from drug trafficking and other trafficking and that is why experts in economics and finance suggest being more attentive. According to a study published by the Scuola Normale di Pisa university institute, during the pandemic the mafias have transformed the Tuscany region, where Florence is, in one of his favorites for laundering dirty money, acquiring restaurants, hotels, businesses, which had fallen out of favor due to the lack of tourists. But the recycling has been verified in many other regions of Italy and can also be a danger for the Vatican.